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September 01, 2005
Can't teach an old dog new tricks?
Bank Mandiri held an investor meeting today to explain the 80% drop in 1H05 net income, as well as the appalling rise in gross NPLs from 7.1% of total loans at YE04 to 24.6% at mid-year. Management notes that BMRI's "current provisioning policy adheres to [Bank Indonesia] requirements," which is a big relief to us . This follows on the removal of Mandiri's senior management in May on allegations of corruption in lending. Although management can't seem to get borrowers to repay, they flag high loan growth as a positive.
Stock is down 14% (ex-currency) in last 10 sessions.
Deutsche calls this a "peak" for Mandiri's NPLs, and maintains a Hold after downgrading in June.
Posted by The Banker at September 1, 2005 07:21 PM